Business of Well-being

Could your Employee Wellness Program Cause a Law Suit?

After decades of fighting for health care reform we finally took the first big step towards improving health care access, quality and delivery in the U.S., and health promotion in the workplace has received a big boost. The final health care bill includes a number of workplace wellness incentives, including:

  • Technical assistance for evaluating workplace wellness programs;
  • Regular surveys on the prevalence and make-up of workplace wellness programs;
  • Grants to help small employers pay for comprehensive workplace wellness programs; and
  • Employee premium discounts of up to 30% (instead of the current 20%), for healthy lifestyle practices or participation in wellness programs, with a potential for the premium discount to rise to 50% in the future.

For those employers now considering implementing a workplace wellness program the options can be intimidating. There can be a fine line between a sanctified workplace wellness incentive, and one that infringes on employee anti-discriminatory rights.

As health reform rolls out new healthy workplace incentives, here are four important points to keep I mind for your company's wellness program.

1.  Choosing Program Goals: The basic components of employer wellness programs are outlined in the new health care reform law and include:

  • Health awareness components: education and health screenings;
  • Employee engagement components: onsite delivery and evaluation;
  • Behavioral change components: classes, seminars & other programs.

Before you choose which wellness components your company will focus on, ask whether your wellness program's goals are reasonable for your company. Take a survey of your employees to see what health concerns are most common.

Workplace wellness programs can focus on stress reduction, smoking secession, weight loss or all of the above, but you want to make sure you allocate your resources where they can be most beneficial for your employees. Once you decide which goals are most important for your company, make sure they are documented and available in detail to all of your employees.

2.  Ensuring Privacy: It is common practice for insurers or employers offering wellness incentives to require current or potential members to complete a health-risk appraisal or medical questionnaire. This is perfectly within the limits of HIPAA, as long as insurers and employers do not use the information to restrict eligibility, benefits, or determine premiums.

The newly passed health reform legislation explicitly states that data gathered for purposes of employer wellness programs may only be used for administering the program.  Standards to ensure such data remains confidential are to be developed by the Secretaries of Health and Human Services and Labor. Ask whether collecting private health information is necessary for achieving your company's set goals.

3.  Determining Program Incentives: Your program's incentives must be activity-based, not achievement-based, which means employees cannot be awarded or punished for successfully achieving the health goals of your program.

If your wellness program encourages employees to be more active by joining a gym, there cannot be any reward or penalty for employees who join the gym but then never or rarely go to work out. You can, however, give financial incentives for employees to join or participate in programming. Be smart with how your frame your incentives: Thaler and Sunstein's book Nudge does a good job explaining can increase participation in your wellness program with subtle framing techniques.

4.  Getting Employees to Participate: Whichever wellness program you decide upon, it MUST be voluntary for employees. You must provide reasonable alternatives for employees who can't otherwise participate - for example, if you have employees who are pregnant or who have pre-existing medical conditions.

Lifestyle discrimination laws enacted by many states protect an employee's right to engage in "any lawful activities away from the employer's premises during non-work time." If, for example, an overweight employee chooses not to participate in a wellness program and suffers adverse employment action, such as failure to get a promotion, your company may be liable in a lifestyle discrimination case.

The incentives for developing a workplace wellness program go beyond the new federal grants for small employers and premium discounts. A well-designed wellness program has the power to improve employee productivity, satisfaction and overall health.

Yet confusion about the legal limits of workplace wellness programs persists, in part, from the interplay of federal and state laws governing insurance plans and wellness programs in the workplace. The new health reform legislation will help to eliminate some confusion by providing federal definitions and legal limits for employer wellness programs, but it is still the responsibility of each company to determine what program components are in the best interest of its employees.


Kopicki, Van Horn, C, and Zukin. (2009). Healthy at Work? Unequal Access to Employer Wellness Programs. WORKTRENDS Survey, Vol 10.1.

Lazzarotti, J. (2006). An Introduction to Wellness Programs: The legal implications of “Bona Fide Wellness Programs”. Bender’s Labor & Employment Bulletin, 6, 270-277.

Melio, M. and Rosenthal, M. (2008). Wellness Programs and Lifestyle Discrimination– The Legal Limits. New England Journal of Medicine, 359, 2, 192-199.

Pearson, S.D., & Lieber, S.R. (2009). Financial Penalties for the Unhealthy? Ethical Guidelines for Holding Employees Responsible for their Health. Health Affairs, 28 (3), 845-852.

Thaler, R. and Sunstein, C. (2009). Nudge: Improving Decisions About Health, Wealth, and Happiness.� New York, NY: Penguin Books.

Health Promotion in the health reform legislation:

About The Authors

Allison Lipps is a candidate for a Masters in Public Health at Tufts School of Medicine. She is currently the Workplace Health Promotion Intern at the NHLBI Center for Employee Wellness and Health Promotion and a Teaching Assistant at Tufts School of Medicine.

Rachel Permuth-Levine, PhD, MSPH, is a public health practitioner and an expert in worksite health promotion. As a health behavior theorist, she strives to use evidence-based programs that produce the best results for her employees. Rachel is also a yoga and fitness instructor.

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